Doughnut revolution heads for UK

HOMER Simpson guzzles them by the barrow-load and before long they are sure to become a staple part of the British diet. After the US burger chains conquered Britain, US-style doughnuts are set to be the next biggest thing on the High Street.

Krispy Kreme of America has just announced that it will open 25 doughnut stores in Britain over the next five years. Competitors are sure to follow.

The doughnut revolution comes as the appetite for salty, high-fat and high-cholesterol burgers and chips appears to be waning. Even as burger chains are fighting a bitter price war, Americans are turning to a different kind of fast food - 'momstyle' buffets, creamy doughnuts and upmarket bakeries.

In the key US market, the burger business has been hurt by the demographic trend that helped it boom in the Eighties. Ageing baby boomers and their children are turning away from burgers and switching to more expensive prepared foods, according to analysts.

Restaurant chains which are offering 'eat-as-much-as-you-can' meals in a buffet are capturing a bigger share of the fast-food dollar. And that means that burgers are increasingly off the menu for America's army of fast foodies.

A price war erupted between McDonald's and Burger King in America last September, the two biggest chains offering 99 cent specials on some of their top-selling sandwiches. The bun fight has helped to send McDonald's share price tumbling to its lowest level in almost a decade and has jeopardised drinks giant Diageo's sale of Burger King to a group led by Texas Pacific and Goldman Sachs. The buyout group is demanding that the price is cut from the $2.3bn (£1.4bn) deal agreed last July because trading has worsened at the world's second-biggest burger chain since then.

Diageo would not say when agreement on a new lower price might be reached, but indicated that negotiations were continuing.

But while McDonald's is having to shut restaurants and lay off workers in other countries, the Golden Arches continue to soar over the UK; there are 120 new restaurants due to open in Britain over the next two years.

In the latest setback, however, it emerged last week that McDonald's is pulling out of half a dozen expensive prime sites in central London. But McDonald's insists that it will still have more restaurants open and trading in the capital at end of this year, but in suburban sites rather than in the West End.

And McDonald's, which has 1,200 restaurants in the UK, said that there were no apparent ' implications' for the local operation from the recent announcement that the chain would close 175 of its 30,000 restaurants worldwide, cutting as many as 600 jobs. 'Our business is doing well and we're planning to open 60 additional restaurants this year and another 60 next year,' a spokesman said.

McDonald's does not break down figures for its UK operation, but sales and profits were up from last year, when lingering worries over BSE, or 'mad cow disease', affected business.